Rupee falls 21 paise against the US dollar

ET Online|

Updated: Jan 14, 2016, 09.42 AM IST

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The rupee fell by 21 paise to 67.06 against the US dollar in early trade on Thursday amid selling in most Asian currencies.

NEW DELHI: The rupee fell by 21 paise to 67.06 against the US dollar in early trade on Thursday amid selling in most Asian currencies, ahead of the domestic WPI inflation readings scheduled for release later in the day.

The domestic currency had edged 1 paisa higher to 66.85 against the greenback on the previous day on dollar selling by banks and exporters.

India Ratings expects the WPI inflation to show a 0.9 per cent degrowth in December, marking the 14th consecutive month of deflation. The rating agency, though, expects wholesale deflation to turn into inflation in Q4 of FY16. WPI readings can influence RBI’s money policy.

Governor Raghuram Rajan has followed an extremely consistent forex policy that has turned the rupee into a relative value trade from a Fragile Five currency, said foreign brokerage BofA-ML in a note.

“We continue to expect RBI to anchor Rs 65/dollar expectations given that Rajan indicates the rupee’s fair value at Rs 62-64 to the dollar. Our own COMPASS value is Rs 56 to the dollar. Seasonality will also turn in favor of exports in the March quarter,” the brokerage said.

The Korean won declined 0.69 per cent to 1,212.40 against the US dollar. The Malaysian ringgit (down 0.35 per cent), the Philippine peso (down 0.30 per cent), the Indonesian rupiah (down 0.29 per cent), the Thai baht (down 0.19 per cent) and the Singapore dollar (down 0.17 per cent) traded lower. The yuan was down 0.09 per cent.

The Taiwan dollar (0.46 per cent) and the Japanese yen (up 0.18 per cent), meanwhile, inched higher.

The dollar index, which tracks the movement of dollar against a basket of six major world currencies, stood at 98.88